HOLIDAY TRAVEL DEMAND IS WEAK, AIRLINES SAY. After air travel picked up earlier in this quarter, airline bookings weakened before Thanksgiving and have not recovered in what is traditionally one of the busiest periods for air travel, American Airlines said in a 4 December regulatory filing reported by Bloomberg.
Without the holiday sales bump, the airline will operate at the high end of its estimated daily cash burn of $25 million to $30 million, American reported.
Still, American will enter 2021 with about $14 billion in liquidity, more than a year’s worth of cash at its estimated burn rate.
American’s glum update reflected Delta Airlines’ 3 December statement that it would burn through more cash than expected this quarter due to faltering sales.
Airline travel spiked over the Thanksgiving holiday, but still only reached about 40 percent of last year’s level before sinking again.
American’s share price rose 1.6 percent to $16.35 as Friday’s trading began. Delta’s stock closed last week at $42.36, down a fraction.
Airline stocks have rallied recently on hopes that a new round of federal aid will carry the companies until a vaccine is widely distributed and returns air travel to consistently higher volumes.
SOUTHWEST AIRLINES WARNS 6,800 WORKERS OF LAYOFFS AHEAD. The employees are slated to be lopped from the payroll this spring if business conditions fail to improve, the carrier warned.
The layoffs would be the first in Southwest’s 50-year history.
The cuts target 2,551 ground crew members, 1,176 customer service staff, 1,500 flight attendants, and 1,221 pilots.
If needed, the layoffs will occur on 15 March and 1 April 2021, the airline said in the statement announcing the move.
Southwest has asked workers to accept a 10-percent pay cut to avoid layoffs. To date, the unions representing the airline’s meteorologists and dispatchers have agreed.
Southwest, known as one of the industry’s most profitable airlines, lost $2.75 billion during 2020’s first six months, laying a foundation for its first-ever annual loss.
U.S. airlines received $25 billion in federal bailouts on the condition that no employees would be laid off through September. On 1 October, American and United airlines dumped 32,000 workers between them.
Delta Airlines avoided layoffs by negotiating buyout deals with some workers and compensation cuts for pilots.
SEATTLE BUSINESS CLOSURES RISING AGAIN. In April, 4,583 Seattle-area businesses were closed because of the virus-imposed economic shutdown, the review website Yelp reported. By 10 July, almost half had reopened, leaving 2,485 still closed.
However, by 31 August the number of closures jumped back up to 3,081, with 59 percent being permanent, Yelp said.
The Seattle metro area lost about 47,000 jobs during the shutdown and will end the year still 20,000 jobs short of last year’s number, according to Oxford Economics and CoStar, a commercial real estate data firm.
MORE THAN 600 CONNECTICUT RESTAURANTS ARE GONE. The businesses have either closed permanently or not set a date to reopen and more will exit before spring, said Scott Dolch, executive director of the Connecticut Restaurant Association, in a statement last week.
He based the figure on his conversations with five of the state’s major food distributors, who have lost accounts over the past eight months.
CRUISE SHIPS WILL STAY IN PORT LONGER. Royal Caribbean Cruise Lines will offer no voyages in December, as it had planned, and instead has extended its hiatus through February. Ships sailing from Australia will stay docked until May.
Norwegian Cruise Line Holdings, the world’s largest cruise line, has pushed back trips until April; Carnival Cruise Line has delayed some sailings from U.S. ports until November and canceled some European cruises because of the continent’s new wave of COVID cases and differing mandates and restrictions from port to port.
Some ships have been in port for more than a year, ever since Carnival’s Diamond Princess liner hosted a COVID outbreak that resulted in more than 700 cases.
FRANCESCA’S IS LATEST RETAILER TO GO BANKRUPT. The 558-store women’s fashion chain, founded in 1999, filed Chapter 11 bankruptcy in Delaware on 3 December.
Tiger Finance, which holds a portion of the company’s debt, is providing $25 million in interim financing as Francesca’s seeks a buyer for the business, including its brick-and-mortar sites.
TerraMar Capital, a private equity firm, has made an initial bid through the court-supervised sale process.
“The financing provided by Tiger will enable Francesca’s to pursue a sale process that will allow us to continue to focus on our omni-channel strategies, optimize our boutique fleet, broaden our customer reach with brand extensions and drive sustainable, profitable growth,” Andrew Clarke, Francesca’s CEO, said in a statement.
The company still plans to close 140 stores, as it announced earlier this fall, and it is attempting to renegotiate leases for the rest of its locations. It may close additional stores, the statement noted.
3M LOPS 2,900 JOBS. The St. Paul-based manufacturer of hundreds of products will drop 2,900 workers as the shutdown’s switch to a work-at-home economy has cut demand for Scotch tape, Post-It stickies, and other office products, the company said in a statement announcing the cuts.
Sales of 3M’s electronic and aerospace products also have fallen.
Overall, 3M’s sales for the first nine months of this year slipped 1.8 percent below those of the same period in 2019.
EVRAZ LAYS OFF 500 STEELWORKERS. Western Canada’s largest steel company is sending 500 workers home later this month when work runs out at its plant in Regina, Saskatchewan.
The plant makes tubular goods, including pipe for the slumping oil and gas industry.
The company produced 4.4 percent less raw steel in the third quarter, while sales slid 9.5 percent, the company said in an e-mail to BNN Bloomberg.
The company laid-off workers in its Alberta plant earlier this fall.
The world’s economic shutdown slashed global demand for steel products and left a glut of finished products in Chinese plants, Bloomberg noted.
BRIDESIDE SHUTS DOWN. The wedding outfitter, doing business mostly online but also in showrooms in Boston, Charlotte, Chicago, and New York, sent an e-mail to customers this month saying the company’s “chapter has come to an end” after two-thirds of its weddings were canceled.
The company raised $7 million last year from investors led by Beringea LLC. Beringea told the Wall Street Journal that Brideside is changing its management. Brideside itself has not responded to questions.
